The terms “proforma invoice” and “invoice” are often used interchangeably in the business world, but they do have different meanings. A proforma invoice is an invoice issued by the seller to the buyer, but not yet approved by the buyer for payment. It functions as an estimate of what will be on the actual invoice and is often used in international trade. The proforma invoice is a document used to declare the value of goods for customs purposes and to indicate the terms of the sale prior to shipping.
An invoice, on the other hand, is an officially documented account of goods or services provided by a seller to a buyer, containing detailed information such as the quantity and cost of the goods/services, payment terms, and the date of delivery. An invoice is an important element of the accounts receivable process and is typically issued after the goods/services